Novo Nordisk shares fall after Trump deal to cut obesity drug prices, marking a major shift in the U.S. pharmaceutical market. The Danish company, along with rival Eli Lilly, has agreed to lower prices of their leading GLP-1 weight-loss medications.
Novo Nordisk and Eli Lilly Agree to Slash Prices
According to the announcement, Novo Nordisk and Eli Lilly will reduce monthly prices for drugs such as Wegovy and Zepbound. The new prices will range from $149 to $350, down from the previous $500–$1,000.
This agreement applies to U.S. government programs like Medicare and Medicaid, as well as direct cash payers. Both drugmakers will also receive a three-year tariff relief under the new deal.
Analysts Predict Short-Term Hit, Long-Term Gains
Market analysts believe the price cuts will hurt short-term profits but may help boost long-term sales volume.
“These price cuts represent a near-term headwind but could increase patient access and sales over time,” said analysts at TD Cowen.
At 0924 GMT, Novo Nordisk shares were down by 1.8%, after dropping as much as 3% earlier in the day.
Increased Competition in the Obesity Drug Market
The weight-loss drug market has become more competitive, with Eli Lilly’s Zepbound gaining momentum. Copycat compounded drugs are also adding pressure on Novo Nordisk’s market share.
Novo’s flagship drug Wegovy, launched in 2021, initially made the company Europe’s most valuable listed firm. However, its market value has dropped nearly 70% since last year due to supply shortages and rising competition.
Financial Impact and Future Expectations
Novo Nordisk said the price reductions will cause a “low single-digit” decline in global sales growth next year. However, the company expects larger sales volumes under Medicare programs in the medium to long term.
The deal also includes provisions for starter doses of upcoming weight-loss pills, priced at $149 per month through government channels and the TrumpRx program. These offers depend on FDA approval.
FDA Expedited Review for New Obesity Pills
The U.S. Food and Drug Administration (FDA) confirmed that both companies’ obesity pills are being reviewed under a fast-track approval process.
Novo expects an FDA decision by the end of the year, while Eli Lilly has yet to submit its candidate drug, orforglipron, for review.
Analysts at Jefferies suggested the expedited process may “limit Novo’s advantage” by helping competitors enter the market sooner.
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